Fulfillment by Amazon (FBA) Review

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As many ecommerce small business owners are already selling on Amazon, it makes sense to let the platform’s expert logistics team also handle the order fulfillment. That’s where Fulfillment by Amazon (FBA), a storage and shipping service from Amazon that lets third-party sellers automate their order fulfillment and shipping services, comes into the picture.

FBA is based on a simple concept: Amazon ships what you sell. Using it, people who don’t want to deal with storing and shipping goods can sell on the Amazon marketplace and other channels. But FBA also has a few pitfalls, such as the lack of a personal touch and slow customer service, which you must consider to decide whether the service is right for your business.

Fulfillment by Amazon (FBA) logo

Fulfillment by Amazon (FBA) Compared

Fulfillment by Amazon (FBA) did not make it onto our list of the best ecommerce fulfillment services. After doing in-depth market research, we found ShipBob to be the best option for most, with an excellent 99.95% fulfillment accuracy rate and a well-designed portal. Request a quote for free.

About Fulfillment by Amazon (FBA)

By paying an extra fee for Fulfillment by Amazon (FBA), sellers can offload most heavyweight activities related to warehousing, storing inventory, shipping, and handling returns and refunds.

At the time of its launch in 2006, Product Manager Joe Walowski said, “We created Fulfillment by Amazon because it’s good for Amazon customers, and therefore, great for third-party sellers. With membership in Amazon Prime growing every day, more and more Amazon.com customers want a great deal on shipping and to receive their orders quickly. Fulfillment by Amazon makes it possible for sellers to offer Amazon.com customers this convenience.”

The ecommerce fulfillment platform has a valuable incentive program under which sellers can enjoy free shipping, storage, removals, and return processing.

Fulfillment by Amazon (FBA) Products and Services

Fulfillment by Amazon (FBA) is all about letting Amazon handle your orders after customers hit Purchase. Simply sign up with the fulfillment platform and store your products in Amazon fulfillment centers. After that, Amazon logistics geniuses will pick, pack, ship, and support customers for the same products.

Upon signing up with Fulfillment by Amazon (FBA), your products become eligible for Amazon Prime’s free two-day shipping and free shipping on eligible orders. Additionally, your customers can avail of Amazon’s trusted customer service and returns.

FBA also offers various specialized services designed to help your business grow without injecting new capital or staffing investments. This includes:

  • FBA Small and Light service that cuts down order fulfillment costs for low-cost, small, and lightweight FBA inventory.
  • FBA Subscribe & Save to offer discounts on eligible FBA products for repeat customers.
  • FBA Pan-EU to offer fast delivery in Prime-eligible European countries.
  • FBA Export to expand your FBA business to more than 100 countries without paying additional charges or dealing with the added complexities of international selling.
  • Multi-channel Fulfillment for selling from personal or third-party ecommerce sites, with Amazon picking, packing, and shipping.

Fulfillment by Amazon (FBA) Health and Stability

Research suggests 200 million Amazon users subscribe to Prime, and 73% of Amazon sellers use FBA to sell.

While there may be some shifts in consumer purchase behavior (i.e., placing orders on social media platforms), ecommerce as a whole is on a steep upward trajectory, and so is Amazon‘s market size, power, and dominance.

Amazon also continues to expand its inventory, product lines, and the number of sellers. Founder Jeff Bezos and his team are constantly improving company processes and operations while acquiring other businesses and services to continue Amazon’s reign as the ultimate ecommerce leader. Plus, with retail spaces and outlets continuing to shut down, the ecommerce giant is very much at the front of the market.

Keeping all this in mind, it’s safe to say Fulfillment by Amazon (FBA) isn’t going anywhere.

Fulfillment by Amazon (FBA) Pricing

Fulfillment by Amazon (FBA) pricing depends on certain variables, including your selling plan, product category, and fulfillment strategy. Here’s a more detailed breakdown:

  • Referral fee/Sell on Amazon fees
  • Closing fees
  • Weight handling fees
  • Other fees based on service/program

Fulfillment by Amazon (FBA) Pricing Structure

As mentioned, Fulfillment by Amazon (FBA)’s overall pricing takes into account four main things: 

  • Selling Plan: If you sell fewer than 40 units monthly, you can opt for the Individual plan. But if you sell more, choose the Professional plan.
  • Referral Fees: FBA has a referral fee percentage for each predetermined category. Note that a minimum fee may also be imposed on most categories.
  • Fulfillment Fees: Depending on whether you plan to ship products yourself or use FBA, you‘ll have to pay a fulfillment fee of a minimum of $3.22.
  • Other Costs: Don’t forget to factor in additional costs you may incur when selling. This includes inventory fees, high-volume listing fees, and refund administration fees. You may be charged more if you sign up for optional programs designed to help boost sales.

Fulfillment by Amazon (FBA) Pricing Comparison

Most popular ecommerce fulfillment services require you to request a customized quote depending on your needs, so it’s difficult to compare the pricing upfront.

You can get started with FBA by paying $39.99 per month, plus selling fees and other charges if you choose the monthly Professional plan. The pricing of other ecommerce fulfillment services like ShipBob (pick-and-pack services starting at $40, plus other applicable charges) and EasyShip (starting from $29 for up to 500 orders per month) highlight the fact FBA isn’t the cheapest service, but it’s also not prohibitively priced.

Trials and Guarantees

Fulfillment by Amazon (FBA) offers a flat 50% off on the selling fee with one-click launch support. You’ll also get 5% back on your first $1,000,000 of branded sales.

Note there’s no money-back guarantee or free trial, however. 

Fulfillment by Amazon (FBA) Ecommerce Fulfillment Service Review

As an ecommerce fulfillment service, FBA has several things working for it. At the same time, you should keep a few caveats in mind. Let’s quickly review the pros and cons of Fulfillment by Amazon (FBA).

What Makes Fulfillment by Amazon (FBA) Ecommerce Fulfillment Service Great

How to get started with Fulfillment by Amazon in four steps
With FBA, you can create a pooled inventory and fulfill orders from various channels, including your own website.

Takes Over the Fulfillment Process: Order fulfillment is an elaborate job that includes multiple activities. This includes packing and sorting items in the warehouse, packing and shipping them, product tracking, managing returns and refunds, and offering online support. Expertly managing all these activities can translate to a lot of money, time, and effort investment. Fulfillment by Amazon significantly simplifies the process, taking charge of all these activities and allowing you to take it easy. Additionally, this lowers your upfront costs when doing business and protects you from incurring otherwise costly errors.

Saves Time and Money: You can use Fulfillment by Amazon (FBA)’s storage and shipping services to save a lot of time and money. Then spend the saved time optimizing business operations, like increasing profit margins, rolling out social media campaigns, and expanding new product lines. Fulfillment by Amazon also eliminates the need for a warehouse because you can store your products in Amazon’s fulfillment centers. Moreover, the platform rewards high-performing businesses with fast-selling products with unlimited storage space.

Enhanced Reach: To maximize sales, using a platform where the masses already spend their time is important. According to Statista, Amazon drew in 2.4 billion visitors to its site, so inadequate reach will never be a problem. But how does this connect to FBA? When you participate in its FBA platform, Amazon is more inclined to highlight your product in front of shoppers.

Subsidized Shipping Fees: Amazon has long-term relationships with several shipping companies. Using its FBA service means you can pay less in shipping than when items are delivered from an individual account. Products sold through FBA are eligible for Amazon Prime and Free Super Saver Shipping, so you can offer customers free shipping over a certain amount.

Buy Box Priority: Selling under FBA puts you higher in the “Buy Box,” which is the big box on the right-hand side of the screen that lets shoppers directly add items to their cart or purchase it right away. This gives you more visibility, which then helps to drive sales. 

Support for Non-Amazon Channels: Another advantage of Fulfillment by Amazon is that it integrates with a ton of third-party tools, including ecommerce platforms. This allows you to choose between selling from your site or another channel but continue using Amazon’s picking, packing, and delivering processes. In other words, you can use FBA’s multi-channel fulfillment to manage inventory, create streamlined workflows, and track orders.

Attractive Incentive Programs: As a new seller on Amazon, you get up to $50,000 in potential benefits, 90 days of free storage and 50 units, and 120 days of storage for apparel and shoes. And this is just the tip of the iceberg—other incentives include a $100 inbound shipping rebate within the Amazon Partner Carrier Program and another $200 discount fulfillment fees with Amazon Global Logistics.

Where Fulfillment by Amazon (FBA) Ecommerce Fulfillment Service Falls Short

A list of FBA storage and fulfillment fees
Amazon FBA charges variable fees that make the service slightly costly.

Cuts Into Potential Profits: While FBA charges aren’t very steep, it isn’t free. Plus, you have to figure out all the applicable fees, including long-term storage fees for goods that sit in inventory for too long, which will cut into your potential profits. You have to take active measures and ensure your stock moves quickly to minimize Amazon storage fees and, more importantly, price your products so that they remain profitable after cutting your FBA fees.

Loss of Control: Signing up for Fulfillment by Amazon (FBA) leaves you no choice but to give up some of your control. This can be hard for merchants wanting control over every aspect of their business and product lineup. The biggest example is that you cannot ship boxes with your brand logo—or even an unmarked box—as all packages fulfilled by Amazon will bear the Amazon logo. You also don’t have the option to include a personal note or other marketing inserts.

Inefficient Customer Service: Amazon FBA customer service has generally been reported as slow, confusing, and even unhelpful. Multiple sellers have reported spending hours on the phone and exchanging multiple emails with customer service executives without a suitable answer to their issues. Issue resolution can take weeks at times. 

Prefers Larger Businesses: One peculiar thing about Fulfillment by Amazon is that while it seems like the perfect solution for small sellers without the budget to store and ship orders on a large scale, the service has certain inventory limits and turnover requirements that cater to larger businesses. 

There have been reports of Amazon forcing FBA sellers who didn’t meet strict fulfillment metrics to remove their inventory from FBA warehouses and encouraging sellers with little inventory or low turnover to use Fulfillment by Merchant instead of FBA.

Fulfillment by Amazon (FBA) Ecommerce Fulfillment Service Compared 

If, after considering the cons, you feel Fulfillment by Amazon (FBA) won’t be suitable for your business, check out our top recommendations for the best ecommerce fulfillment service. We found ShipBob to be the best option that offers exceptional fulfillment services, complete with a 99.95% fulfillment accuracy rate.

Final Verdict

While Fulfillment by Amazon (FBA) is a good service to simplify ecommerce fulfillment and scale your business, you need to be careful with the fees and have higher turnovers to make the most of it. Ultimately, it’s a viable option, but if you’re looking to process orders in a more personalized manner with higher standards, you’ll find independent ecommerce fulfillment services to be more appropriate.


Source: quicksprout

Fulfillment by Amazon (FBA) Review